Press Releases

August 1999

Construction marketing consultancy uses Best Practice quality systems to underpin growth

'Developing systems that drive your business' is how Leading Edge Management Consultancy views quality. Four years after gaining ISO 9001 accreditation, it received a glowing report at its most recent six-monthly inspection. Independent auditor Stephen Jellis of European Quality Assurance (EQA) highlighted the main differences this time around. Describing the quality management systems in place at Leading Edge he felt that the systems were "…representative of Best Practice in many areas".

John Pratt, Chairman and Chief Executive feels that the secret of Leading Edge's success owes a great deal to its culture supporting quality and constantly striving to drive improvements in process. This attitude has enabled Leading Edge to deliver added value to clients through better use of knowledge and closer supplier relationships, consistently delivering on time. Growth has exceeded 15% per annum over the last four years. With the roots of ISO 9000 traditionally pointed towards a manufacturing orientated environment, application within the service sector has been a challenge, in particular the handling of franchise consultants working off-site.

Using widely available database technology the Leading Edge Operating System has been developed to allow the free flow of quality system information and knowledge throughout the organisation allowing staff to monitor themselves and improve against targets. The system also provides methodologies and on line manuals for consultants.

July 1999

Construction output will grow for the next 10 years

Forecast for 1999 revised upwards

The construction industry's output has not been hit as much as has been predicted and growth will be stronger than was previously thought, according to Leading Edge's latest computer generated forecast.

Output is now forecast to be 2.6% this year and 2.2% in 2000, compared with the 1.4% for both years, which seemed likely in January. The main improvement has been in housebuilding which is now forecast to grow 2.9% this year, rather than fall by 0.1%, due to the faster growth in the South East. However, in 2000 the increase in housing output although continuing to grow, has been revised down slightly as it will start from higher base. As a result of this, deliveries of bricks, blocks, cement and roof tiles are all forecast to rise this year and in 2000.

For materials that go into buildings later on in the process like plasterboard, this year will be more difficult than 1998, but at least there will be better prospects for 2000. Low interest rates and the level of confidence in the economy in the South East is fuelling enthusiasm for home ownership again after the fright of negative equity in the late 1980s. So much so, that those landlords who let more up market accommodation, are finding their property lying empty.

The high value of sterling has led to a greater than previously thought fall in industrial output. Although the need to remain competitive will drive manufacturing companies to strive for the latest technology, which will increase output more than was previously thought over the next ten years. The long lag time of commercial building will keep output growing strongly this year, but less strongly in 2000 as millennium projects are completed.

The outlook, over the whole ten years that the forecast covers, is that construction output will continue to rise more steadily than previously, relating to the economic cycle, with infrastructure remaining flat and publicly funded construction output slightly falling. According to the forecast, the materials with the most worrying outlook are lightweight concrete blocks and fibre cement cladding.

Published letters

Investors Chronicle

Dear Madam,

Housebuilders on the Edge

Your article on the housebuilding sector asks why housebuilders appear to have everything going for them, but as a sector continue to disappoint. After all everyone needs a home of some sort and the number of households needed continues to grow by more than the population. As market analysts in the construction industry, this is something that has puzzled us too.

We have come to the conclusion that most housebuilders are reactive rather than strategic and so will always get caught out when the direction of the market changes. We have been monitoring house starts and completions. You would expect one to follow the other with a few months lag time. However, if you look at the graph I have enclosed, it does show that housebuilders consistently fail to anticipate their market accurately. If things look good they continue to build until the market runs out of steam. When this happens they then discount the houses that are standing there, which can only irritate those people who paid full price.

If only they planned ahead taking into account the economic environment in which they work, they could predict more accurately how many houses to build. This would help them plan their cash flows better as well as please shareholders.

BSEE

Dear Sir,

New Horizons: Laying down a challenge

There has been a lot of focus on the Egan report recently in the trade press and, as far as I can see, it echoes Latham's push for partnerships being the catalyst for a construction industry culture shift. But Egan's message about understanding what clients want seems to have got lost.

I challenge your readers to ask themselves a few inwardly looking questions:

• Have you asked your clients what they expect from you?
• Have you quantitatively measured how your performance matches up to their expectations?
• Have you compared this to how your competitors are performing?

If all the answers are yes then you have performed a full audit of client expectations. If the answer is no, how do you know you are concentrating your efforts in the right areas? Are you just wasting time and resources?

Your New Horizons section highlighted that the construction industry has historically spent little on research. There may be a comparison to be made here with the progress of other industries such as food and tourism. If the industry does ever realise the value of asking its clients and suppliers a few simple questions, I just hope that a few of them are about service, because products and construction are fast becoming commodities.